Ball used 3.23 million megawatt hours of energy in 2014, 5 percent less than in 2012. Our metal beverage, tinplate food and aerosol can businesses accounted for 88 percent of our total energy consumption. In these businesses, we measure our energy efficiency on a “per unit of production” basis. We improved the energy efficiency in these businesses by 4 percent in 2013-2014 and by 8 percent since 2010. In our slug and aerospace businesses, we achieved significant energy efficiency improvements of 15 percent and more since 2010.
Most Ball plants have energy management systems in place, typically aligned with the ISO 50001 energy management standard. In 2014, our European plants began the energy management system certification process. By defining plant- and management-level responsibilities, these systems enable us to reduce our energy use, energy costs and greenhouse gas (GHG) emissions systematically.
To significantly and cost effectively reduce our energy consumption, we developed a global energy strategy in 2011 that addresses energy supply and demand and requires the consideration of energy efficiency when making investment decisions. At Ball, we focus our energy efficiency efforts in six key areas.
A Multifaceted Approach
Opposing trends, such as increases in can sizes, shapes and labels, line or plant curtailments, and new line startups, often offset progress toward our energy efficiency goals. Our efficiency decreases as manufacturing line stoppages increase due to reduced demand or we experience a greater number of height, diameter or label changes. Our beverage packaging business continues to experience significant changes, including the growth of our specialty can business and the continued decline of standard 12-ounce cans in North America. To efficiently and effectively manage these challenges, we invest in our businesses and expect additional energy performance gains in 2015 and beyond.
Committed at All Levels
Ball’s management team is committed to energy improvements and invested approximately $18.8 million in energy-saving projects in 2013 and 2014. These measures will generate an estimated electricity savings of 46 million kilowatt hours and natural gas savings of approximately 117 million kilowatt hours per year, exceeding the annual energy consumption of 6,200 average U.S. households.
Each year, every Ball plant commits to energy efficiency goals supported by detailed action plans. Real-time energy information systems enable us to better understand, manage and report on the performance of energy-consuming operations, and to better benchmark processes so we can identify and exchange best practices.
As a global company, we benefit greatly from exchanging information and best practices among our manufacturing locations. Membership in programs, such as the U.S. Environmental Protection Agency’s “Energy Star” and Department of Energy “Better Buildings, Better Plants,” also provides tools and technical resources to enhance our efforts and allow us to learn from other organizations.
We continue to work on further improving our energy data measurement and reporting capabilities. By the end of 2014, we installed comprehensive energy information systems in 18 plants, enabling us to better understand and manage energy consuming processes in our operations and improve total system performance. Other plants are realizing significant energy savings using smaller scope energy monitoring. We will continue installing additional energy monitoring devices in our operations going forward.
One focus area for improvement is line control optimization. When production lines stand still for short periods of time, all equipment should not run on full power. By installing equipment that allows slowing or shutting down certain systems, such as variable-frequency drives (VFD) that control motor and pump speed, we can realize energy savings and reduce our carbon footprint.
Famosa, the leading supplier of aluminum cans in Mexico, has licensed Ball Corporation’s manufacturing technologies since 1974. An initial, metric-based benchmark survey between both companies identified ways for Famosa to use energy more efficiently and reduce costs.
In late 2010, Ball visited Famosa’s plant in Toluca to conduct an in-depth energy assessment and to exchange information with engineers from all three Famosa plants. Our energy experts suggested several low- or no-cost measures to Famosa in the areas of compressed air, vacuum, operational control, lighting and ovens. The potential energy savings they identified was approximately 12 percent of the plants’ energy usage. By increasing employee awareness and investing less than $200,000, Famosa realized significant energy savings.
In October 2011, a Famosa team visited one of Ball’s plants for more benchmarking and an idea exchange. Ball recommended conducting oven audits in Mexico with an existing supplier. In November 2011, one of Ball’s engineers attended an audit in Ensenada, Mexico, and gained insights that will benefit Ball’s operations as well.
Energy in Action
Employee Awareness and Engagement
All Ball employees are committed to energy efficiency. A team effort is required to achieve our plant energy reduction goals, and many facilities establish formal voluntary energy conservation or broader sustainability teams each year. Ball's metal beverage packaging plant in Saratoga Springs, N.Y., has a multi-year track record of improving energy efficiency. Between 2010 and 2014, the plant improved its energy efficiency by 5 percent. In 2013, by installing variable frequency drives (VFDs) on each motor to control motor speed and energy usage, the plant achieved a 75 percent reduction in motor power usage―with an annual financial saving of approximately $39,000. Though the plant is already one of Ball's most energy efficient plants worldwide, the team in Saratoga Springs continue to develop and test new ideas to further maximize the value of our existing businesses.
Machinery and Equipment
In an aluminum beverage can manufacturing plant, air compressors consume most of the electricity (between 20 and 30 percent). We audit our compressed air systems and optimize performance by reducing system pressure, minimizing wasteful air use and leaks, and decreasing manufacturing equipment demand. Since 2011, we installed more efficient compressors and connected additional equipment to low-pressure systems. At the end of 2013, 21 of our metal beverage packaging plants worldwide used dual-air systems that supply equipment with either high- or low-pressure air to reduce energy use and costs.
Ball uses ovens to enable further processing after washing cans and applying coatings and inks. These ovens comprise up to 75 percent of a beverage can plant’s natural gas usage and up to 20 percent of its electricity usage. In Europe, we conducted oven audits in 2011 and implemented improvement projects, contributing to natural gas efficiency gains of 15 percent since then.
Building on this experience, we performed extensive audits in all North American beverage can plants in 2013, identifying and implementing several low-cost opportunities to reduce gas consumption. These projects, combined with increased employee awareness about oven energy use and related costs, allowed us to realize gas savings of approximately 36 million kilowatt hours per year, equal to more than 6,600 metric tons of carbon dioxide emissions, or removing 1,380 cars from the road.
Though Ball Aerospace only accounts for less than 3 percent of Ball’s energy consumption, optimizing energy usage is a high priority for this business. Cleanroom operations are a major energy usage area. In these rooms, the levels of environmental pollutants, such as dust and microbes, are reduced to enable sensitive aerospace instruments and other technologies to be manufactured and tested. We continue making improvements to reduce energy consumption in operating these cleanrooms.
We recently modified the HVAC automation control system for one of our large cleanrooms to reduce air flow during unoccupied hours (weekday nights and weekends). The estimated electricity reduction is about 1,100 megawatt hours per year, equivalent to more than 758 metric tons of carbon dioxide emissions.
Our Rome, Georgia, beverage can plant opened in 1993 and since then had not optimized the main gas consumers, primarily ovens and boilers. In 2013, employees installed digital meters on the equipment, and conducted oven assessments with an external consultant. Real-time monitoring now allows employees to identify energy-related issues with the machines quickly and to test new equipment settings to decrease energy use.
Energy monitoring helped quantify a savings of several million kilowatt hours annually at the regenerative thermal oxidizer (RTO), which will be realized in 2014 when the old RTO will be replaced by state-of-the-art technology. The oven assessments provided various recommendations and the Rome team immediately addressed several major issues, including a decrease in the ovens’ exhaust air flow. In 2013, the plant reduced its overall gas usage by 7 percent, saving GHG emissions equivalent to what 227 cars release per year. Additional energy saving opportunities, such as replacing inefficient burners and adding variable frequency drives, will be addressed in 2014.
Energy in Action
Building on lessons learned from the construction of the Trȇs Rios, Brazil, can plant in 2009 and 2010, Latapack-Ball began building another plant in Alagoinhas, Brazil, in April 2011. During this new plant’s design stage, engineers from Latapack-Ball and Ball made energy efficiency a priority.
They optimized the production line’s design to reduce the need for conveying, piping and other infrastructure. They also significantly reduced the need for vacuum and compressed air by making better use of mechanical power and gravity to move cans along the line. As a result, the plant utilizes 36 fewer motors than previously built plants. An energy information system will continuously monitor energy use and indicate any needed improvements.
All large motors are equipped with variable-frequency drives and sensing equipment so the motors slow down when cans are not being transported. The outstanding performance of the Trȇs Rios plant’s compressed air system was duplicated using even less piping.
Energy in Action
A regenerative thermal oxidizer (RTO) is a pollution control system that uses high temperatures to destroy volatile organic compounds emitted during can coating processes. RTOs normally operate using natural gas and are thermal efficient, meaning the media in an RTO retains and transfers heat, which lowers the amount of natural gas needed.
In 2013, Ball replaced an inefficient heat recovery system (recuperative oxidizer) with a RTO in our Springdale, Arkansas, facility to heat the water in the production process and the plant more effectively. This improved the plant’s thermal efficiency from 55 percent to 95 percent and reduced the plant’s overall natural gas usage by approximately 6.8 million kilowatt hours per year.
The engineering team at our Oakdale, California, plant successfully upgraded the compressor system. During this $500,000 project, two new 300 HP (horsepower) compressors replaced four old units. One of the new compressors can adjust to the plant’s compressed air demand. Through this project, the plant realized an annual electricity savings of more than 1.25 million kilowatt hours and qualified for a rebate by the regional utility company. The project also significantly reduced annual maintenance costs.
In addition, the plant implemented several measures in 2011 to capture the heat generated by its regenerative thermal oxidizer (RTO). The system uses exhaust air from the RTO and blends it with fresh air to get a consistent air temperature that is fed back to the ovens, reducing the amount of gas they consume. The system also captures exhaust heat to warm the building in the winter.
Energy in Action
Heating and Cooling
Heating, ventilation and air conditioning (HVAC) control during the heating season is another energy efficiency opportunity. Central control systems and higher awareness of HVAC-related energy usage and costs are driving progress. We identify optimal temperatures for different areas within a plant and educate employees on how they can achieve these temperatures with the lowest energy input. Installing heat curtains, for example, reduces heat or cooling loss.
In 2012, Ball started production at a new beverage can plant in Qingdao, China. By utilizing state-of-the-art technology that delivers both energy and operational savings, they began creating one of the most energy-efficient Ball plants in the world.
They installed geothermal heat pumps that save 30 percent of energy in the summer and up to 70 percent during the heating season. They also use the moderate ground temperatures as a heat source (in the winter) or a heat sink (in the summer).
Electricity usage is more efficient thanks to the use of high- and low-air pressure systems, variable frequency drives with management control systems, ambient light in the manufacturing area, and high-efficiency motors and lighting. Gas usage is lower due to oven insulation, high-efficiency burners and utilizing fans to recirculate the heat generated in ovens.
In addition, the plant uses solar heating to provide hot water and recycles grey water for restrooms or irrigation. Altogether, these measures boost energy efficiency and significantly reduce operational costs.
Energy in Action
Ball continues to replace old lighting with energy efficient lighting. Our plant in Shenzhen, China, for example, replaced 450-watt ceiling lighting with equally bright 180-watt lamps, saving 460,000 kilowatt hours annually. In our North American and European facilities, we continue to install LED lighting in a number of facilities.
Ball has reported scope 1 and 2 greenhouse gas (GHG) emissions since 2002. In 2014, Ball also started reporting scope 3 emissions:
- Scope 1 emissions are direct GHG emissions from sources owned or controlled by Ball, and primarily include emissions from fossil fuels, such as natural gas and diesel, burned on site.
- Scope 2 emissions are indirect GHG emissions from the generation of electricity, heating, cooling and steam generated off site and purchased by Ball.
- Scope 3 emissions include indirect GHG emissions from sources not owned or directly controlled by Ball, but related to our activities. Examples include emissions related to the products and services we purchase and employee commuting.
Since 2007, we have disclosed our GHG emissions annually through the CDP (formerly the Carbon Disclosure Project). Today, we submit information to three of CDP’s programs: climate change (investors), supply chain and water. A high level of transparency of our sustainability performance, including corporate and product carbon footprints, in particular, is important to ensure our customers understand our sustainability commitments and how we contribute to their targets.
Scope 1 and 2 GHG Emissions
In 2014, Ball’s operations emitted 1.23 million metric tons of GHG emissions (scope 1 and 2). We committed to improving our GHG emission intensity, which is calculated based on our division-specific normalization factors, by 10 percent by 2015 (compared to a 2010 baseline).
To reduce our GHG emissions, Ball continues to increase energy efficiency and investigate options to use onsite renewable energy. By year-end 2014, our carbon intensity decreased by 9.3 percent since 2010. About 70 percent of our scope 1 and 2 GHG emissions resulted from our electricity consumption, while 26 percent came from stationary combustion emissions.
Our management and reporting systems, including internal audits, ensure the accuracy and reliability of our environmental information. We again appointed WSP to provide independent assurance of Ball’s 2014 GHG emission data. WSP’s scope of work was to provide limited assurance of Ball’s scope 1 and 2 GHG emissions in line with Greenhouse Gas Protocol. Visit our reporting hub for the external assurance statement.
GHG Emissions along the Value Chain
We align our scope 3 emissions reporting with the “Corporate Value Chain (Scope 3) Accounting and Reporting Standard” published by the World Resource Institute (WRI) and the World Business Council for Sustainable Development (WBCSD). Accordingly, we evaluated GHG emissions from 15 categories covering upstream emissions, like those from our suppliers, and downstream emissions, such as those from our customers (see diagram).
Our 2014 scope 3 emissions include the following categories: "purchased goods and services" (96 percent of our quantified scope 3 emissions), "waste generated in our operations" (0.1 percent), "business travel" (0.1 percent), and "downstream transporation and distribution" (3.7 percent). We continue working toward quantifying other categories of scope 3 emissions, such as employee commuting, and upstream logistics. However, based on initial estimates, these categories represent only a minor share of our scope 3 emissions. More than 90 percent of our scope 3 emissions originate from metal production.
With better data on our scope 3 emissions, we can effectively identify relevant risks and opportunities associated with emissions from our value chain, develop reduction plans and engage value chain partners in GHG management.
Product Carbon Footprints
In 2014, we launched our product carbon footprint reduction target: by 2020, we strive to cut the carbon footprint of our beverage cans by one-fourth.
Brian Demain, CFA
Janus Capital Group Inc.
I believe that tracking and reporting supply chain GHG statistics would further differentiate Ball from competitors and competing substrates when explaining their value proposition to customers, retailers and consumers who are all placing increased emphasis on sustainability.
As an investor who recognizes that a coherent sustainability strategy is critical to success in the packaged good space, I am impressed with the emphasis that Ball places on sustainability throughout their organization. I feel that not only responsibility bestowed at the board and C-suite level by the Sustainability Steering Committee, but also monetary incentives available to all employees to reduce CO2 emissions, are key to Ball’s progress in tackling these issues. Ball’s effort to reduce GHG emissions by 10 percent over a 5 year period will not only help the environment, it will reduce Ball’s input costs.
It is encouraging that as of their last CDP submission, Ball is 48.5 percent of the way toward their 5 year goal after only 2 years. However, I feel that Ball could improve further by tracking and publicly reporting all forms of emissions, including Scope 3, which includes emissions by Ball’s supply chain.
As an investor I recognize the inherent advantages of the can in shipping, the fact that nearly 70 percent of all cans are recycled on a global basis (the largest of any packaging substrate), and Ball’s efforts to lightweight cans save not only GHG emissions, but reduce the cost of the can which saves customers and consumers money. I believe that tracking and reporting supply chain GHG statistics would further differentiate Ball from competitors and competing substrates when explaining their value proposition to customers, retailers and consumers, who are all placing increased emphasis on sustainability.